Ericsson teams with Cisco to develop future networks

Ericsson has entered a major new partnership with Cisco to collaborate on developing the networks of the future.

The vendors will combine their capabilities across the routing, data centre, networking, cloud, mobility and network management segments. The partnership has a focus on building a common network-function virtualisation (NFV) and software-defined networking (SDN) architecture.

The agreement encompasses a reseller agreement and a service partner agreement to allow each company to provide products and services from the other.

As well as existing technologies, Ericsson and Cisco will collaborate on the development of new networking technologies for 5G — the next evolution of mobile networks due for commercialisation in 2020 — as well as cloud and IP networking and the Internet of Things (IoT).

The arrangement is expected to help each company generate at least $1 billion in additional sales by 2018. Ericsson added that it expects to be able to achieve synergies including cost reductions of 1 billion kronor ($115.4 million) by the same year.

Analysys Mason research director Dana Cooperson commented that this goal seems achievable, considering the scale of each company and the size of the addressable market for enterprise-driven communications and IoT services.

“Analysys Mason sees this as an aggressive move, positioning Ericsson and Cisco against their main competitors — including Huawei, HP and the combined Nokia/Alcatel-Lucent — for dominance as the partners of choice for CSPs wanting to become digital service providers (DSPs),” she said.

Cooperson said to succeed with the partnership the companies will have to meet three conditions. Their common architecture will need to be robust enough, and the companies will need to show that they are not too big to move quickly to create joint solutions.

“[In addition], customers will need to be comfortable that Ericsson and Cisco are not... strengthening their leading positions in mobile infrastructure, professional services and IP infrastructure to create de facto lock-in.”

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